Opinion: Scrap the tax on e-books

A liberal success over many decades has been to protect the tax-free status of books and newspapers. A tax on books would be abhorrent as it would be a tax on free speech.

A democratic, civilised society requires the free exchange of ideas, information and art in books. Books are vital for people, young and old, who wish to educate themselves and improve their prospects.

E-books (for the unitiated, books in electronic form) in the UK have, however, been made subject to VAT at 20%. This is a gross injustice that fails to recognise that the e-book is simply a modern format with the same vital function as a book on paper.

This is a tax that should be scrapped and Liberal Democrats should lead the fight. I have launched an online petition that people can sign here.

On a related topic, Neelie Kroes, Vice-President of the European Commission, is calling for a single market (or a free market if you prefer) in e-books and wrote about this in the Guardian yesterday.

* Antony Hook was a Liberal Democrat MEP for South East England (2019) and has practised as a barrister since 2003. He is currently Leader of the Liberal Democrat Group on Kent County Council.

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  • Toby D'Olier 29th Jun '12 - 10:14am

    Yes yes and yes, I’ve been talking about this for ages, but having spoken to an MP apparently to make E-books vat exempt or even vat-reduced requires the EU to pass legislation to that effect, the UK gov can not alone decide what tier of VAT taxation an object sits at (only the level at which we tax those levels)
    This is incredibly frustrating if true, the idea that an e-book is any different as a product that a paper book is ridiculous.

  • I’m not convinced that not exempting books from VAT would be abhorrent and am tempted to say the better solution is to extend VAT to paper books and newspapers.

    Should Kindles be VAT-free by the same logic? Computers? Pens? Paper? Electricity? Educational DVDs? Non-educational DVDs? Shall we see if we can make the VAT system even more ridiculous?

  • Bravo it may not happen immediately but its a start.

  • E-books also require less natural resources, are not shipped around and therefore do not contribute to congestion or pollution and……I’m an addict firstly on a Sony reader I got several years ago as a present and latterly on my iPad…

    OK the last point is probably not a good one to base a tax decision on..

  • Richard Dean 29th Jun '12 - 11:23am

    I agree with Adam that books are not as vital as food, water, or medical assistance. Some books are certainly informational, but by no means all of them.

    Tax is simply a contribution to the costs of providing the governance services that maintain and improve the arrangements of civilzation whioch includes things that allow e-books to be created. Not to tax the books would make those costs externalities that have to be paid by people who, by definition, are not receiving the benefits of the books!

  • Firstly, look at the difference between “Exempt” and “Zero rated” folks.

    Exempt means not liable to VAT at all and no right to deduct input VAT on the costs incurred in making them. Zero-rated means liable to VAT (and therefore credit for input tax ) at the zero rate.

    The zero-rating of books and newspapers comes from Purchase Tax days, when the words printed matter were used. Technology has overtaken this , and the whole subject should be looked at again.

    The cause is on the face of it laudable, but I’m not sure that I can totally agree. The “addition to knowledge” argument I can understand, but fiction and the like ? Add to knowledge? Educational?

    A better way would be to move them , and printed matter such as “newspapers and magazines” to the reduced rate. And, heresy in this, all books to the reduced rate (from zero)

    State schools couldn’t argue against this, as they get input tax deduction through the local authorities etc, And 5% on the cost of your “Model Engineer” or “Crochet Monthly” is little in the scheme of things.

    It’s worthy of debate, but there are other ways to level the field other than zero-rating e-books.

  • Guy Patching 29th Jun '12 - 11:58am

    You have a problem in that e-books are commonly purchased from Amazon, with a tax haven in Jersey. At least by VATing the books one buys on a Kindle there is a contribution to the exchequer where otherwise you’d be letting a service go free.

  • I don’t believe this is allowed under EU law, but you could certainly rate both e-books and paper books at 5%.

  • @ Robson – it is the idea that EU law is immutable that should not be allowed!

  • Tax is simply a contribution to the costs of providing the governance services that maintain and improve the arrangements of civilzation whioch includes things that allow e-books to be created.

    Personally I wouldn’t call something extorted by a monopoly under pain of punishment a “contribution”.

  • Richard Dean 30th Jun '12 - 10:26am

    Tax is certainly a contribution. It’s just not a voluntary one. But, we freely elect the government that determines how much we should pay, so in the long term it doesn’t have the same wholly compulsory characteristic that a payment to organized crime might have. We can vote to change the tax we are taxed.

  • Hah! That has never worked for me.

  • I am more annoyed that if I buy an e-book on Amazon I can’t sell it or give it away. There is a good market in cheap second hand books. Why doesn’t the government force Amazon to allow you to resell your kindle books? (It is technically possible)

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